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TMI Blog1951 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... to a firm then carrying on business under the name and style of Laik Banerjee & Company. On the same day the said receiver with like permission mortgaged these properties to the said firm as security for the due repayment of the loan of Rs. 100,000 advanced by that firm. The Malias joined the receiver in executing the aforesaid leases and the mortgage. As a result of these transactions the firm of Laik Banerjee & Company became the lessees for 999 years of the two properties as well as the mortgagee of the lessors' interest in the same. By diverse processes not necessary to be detailed, the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortgagee under the mortgage of August 10, 1908. On March 31, 1922, Deva Prasanna filed suit No. 78 of 1922 for enforcing the mortgage of 1908. Preliminary decree was passed in the last mentioned suit on ' July 31, 1928, and a final decree for sale was made I on February 26, 1929. In execution of this final decree the mortgaged properties were sold at a Court i sale and were purchased by Deva Prasanna for' Rs. 59,000. This sale was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, rejected without any sort of adjudication. 30th January 1937." In May 1937, the Searsole Raj Estate came under the charge of the Court of Wards. By a Kobala executed with the permission of the Board of Revenue Raja Pramatha Nath Malia and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in full settlement of his claim under the personal decree against the Raja. By an agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the Kumars if he was paid Rs. 90,000/- within two years from that date. Senapati Mahal orginally belonged to the Raja but had been tranSferred by him to his two sons. A creditor, however, had filed a suit under section 53 of the Transfer of Property Act challenging that transfer and had actually got a decree declaring that transfer as fradulent and void as against the creditors of the Raja An appeal was filed by the Kumars which was pending at the date of the Kobala of January 4, 1939, and, in the circumstances, it was considered safer to join the Raja in the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court to give them relief by exercising the powers given to the Court by section 36 of the Act. There was also a prayer for reconveyance of the Senapati Mahal. The respondent filed his written statement setting up a variety of defences rounded on merits as well as on legal pleas in bar. On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9, 1941, "for a preliminary hearing of the suit and particularly of such of the issues as have been based on the pleas in bar." Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows: "Does the plaint disclose a valid cause of action for the suit ?" The appellants preferred an appeal to the High Court at Calcutta. Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in "a suit to which this Act applies" and consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Court or to be exercised either in any suit to which this Act applies or in any suit brought by a borrower for relief under the section and (c) that the Court is called upon to exercise all or any of the powers conferred on it by the section if the Court has reason to believe that the exercise of one or more of the powers will give relief to the borrower. In the present case the borrowers have instituted a substantive suit for relief under section 36 and, therefore, if there was nothing also in the section and the Court had the requisite belief, the Court could exercise all or any of the powers and give relief to the borrowers in terms of the prayers of the plaint. There are, however, two provisions to sub-section (1) of section 36. The relevant portion of the second proviso is expressed in the words following: "Provided that in exercise of these powers the Court shall not- (i) * * * * (ii) do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or * * * *" The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cannot be reopened. The same view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari v. Girish Chandra 48 C.W.N, 406., which overruled two earlier decisions to the contrary. The construction put upon section 2 (22)by the Special Bench and the reasons given by them appear to us to be well-founded. In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date. The only question that has therefore, to be considered is whether any proceeding in execution was pending on or after that date. The answer to this question will depend on the true meaning and effect of the orders made by the executing Court- (i) on January 30, 1937, and (ii) on June 2, 1939. As to (i)--It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court. Order XXI, rule 57, is expressed in the following terms:- "Where any property has been attached in execution of a decree but by reason of the decree-holder's default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n execution is dismissed any attachment made under that application should fall to the ground or should subsist, and the legislature has provided that it is to fall to the ground." The new rule thus' introduced left two distinct courses open to the executing Court in the situation envisaged by the rule. Each course had its advantage as well as its disadvantage. Thus the adjournment of the execution proceedings kept the attachment alive without any special direction. While the adoption of this course helped bona fide arrangement between the decree-holder and the judgment-debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings. On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calculated to discourage decreeholders from giving even reasonable accommodation to the judgment-debtor on account of the destruction of the attachment which left ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd mentioned above. The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping. If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all. The Court could by simply adjourning the proceedings automatically continue the attachment without any express direction in that behalf. The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal. Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column. The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal. That the claim case was automatically dropped is yet another indication that the execution case was at an end. The fact that the judgment-debtor had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere has been no application for the execution of the decree at any time by the decree-holder there is, nevertheless, an execution proceeding pending merely because the attachment continues. Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding. Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed. In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pending execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court. As to (ii)--Learned advocate for the appellants then contended that the petition (Ex. 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was instituted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of "a suit to which this Act applies". I do not think this argument is sound. The petition (Ex.2a) was not really an application at all. See Raja Shri Prakash Singh v. The Allahabad Bank Ltd. 33 C.W. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecree-holder invokes the protection of two exemptions contained in the Act: (1) Section 86 (1), proviso (ii), which exempts inter alia "any decree other than a decree in a suit to which this Act applies which was not fully satisfied by the first day of January, 1939". This raises a dispute as to whether the respondent's decree was passed in a suit to which the Act applies. (2) Section 36 (5) which exempts "the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide and that he had not received the notice referred to in clause (a) of sub-section (1) of section 28". This raises the question whether a sub-mortgagee is an assignee within the meaning of the Act. On the first question "a suit to which this Act applies" is defined in section 2 (22) as meaning "any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a proceeding in execution for (among other things) the recovery of a loan advanced before or after the commencement of this Act." This definition has been construed as requiring that the "proceeding in execution "referred to therein should be pending on 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide. Nor could he have received the notice referred to in clause (a) of' sub-section (1) of section 28 as the transaction took place long before the Act was passed. It is not disputed that section 36 (5) applies to pre-Act debts. [See Renula Bose v. Manmatha Nath Bose]. The only question, therefore, is whether the respondent as sub-mortgagee is an assignee within the meaning of sub-section (5) of section 36. The learned Judges in the court below held that he was not, following an earlier decision of their own court in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya 50 C.W.N. 407. (2) L.R. 76 I.A. 74. That decision, however, was reversed by the Privy Council in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya where their Lordships dealt with the question now before us in the following terms :- "It was suggested, in the judgment of Mitter J. (with which Waight J. agreed), and in the argument for the respondents that if a sub-mortgagee were an 'assignee' within section 36, sub-section (5), of the Act., certain difficulties and anomalies would result. Their Lordships cannot agree with this suggestion. They express no view as to the position which arises if the sub-mortgage contains only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kota and we make over the said Deed of Indenture to you". The decision referred to above is, therefore, directly in point and rules the present case. It was suggested that the said decision was inconsistent with the earlier decisions of the same tribunal in Ram Kinkar Banerjee v. Satya Charan Srimani 64 I.A. 50. (2) 68 I.A. 67., and Jagadamba Loan Co. v. Raja Shiba Prasad Singh. Stress was laid upon the expression "all the rights of the mortgagee" used by their Lordships in the passage quoted above, and it was pointed out that in the earlier decisions they held that in India a legal interest remained in the mortgagor even when the mortgage was in the form of an English mortgage, and that the interest taken by the mortgagee was not an absolute interest. This proposition, it was said, implied that in a sub-mortgage all the rights of the original mortgagee are not assigned to the sub-mortgagee and that the mortgagee still retains a legal interest in the original mortgage. This is a rather superficial view of the matter. In the earlier cases their Lordships were considering the quantum of interest transferred by a mortgagor to a mortgagee in a mortgage of leasehold interest for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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